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14-Week quarters

Author

Listed:
  • Johnston, Rick
  • Leone, Andrew J.
  • Ramnath, Sundaresh
  • Yang, Ya-wen

Abstract

Many firms define their fiscal quarters as 13-week periods so that each fiscal year contains 52 weeks, which leaves out one or two day(s) a year. To compensate, one extra week is added every fifth or sixth year and, consequently, one quarter therein comprises 14 weeks. We find evidence of predictable forecast errors and stock returns in 14-week quarters, suggesting that analysts and investors do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of analysts and investors.

Suggested Citation

  • Johnston, Rick & Leone, Andrew J. & Ramnath, Sundaresh & Yang, Ya-wen, 2012. "14-Week quarters," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 271-289.
    • Handle: RePEc:eee:jaecon:v:53:y:2012:i:1:p:271-289
    DOI: 10.1016/j.jacceco.2011.06.003
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    References listed on IDEAS

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    Cited by:

    1. Athanasakou, Vasiliki & Simpson, Ana, 2016. "Investor attention to rounding as a salient forecast feature," International Journal of Forecasting, Elsevier, vol. 32(4), pages 1212-1233.

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    More about this item

    Keywords

    Analysts; Market efficiency; Fiscal year;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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